Sunday, February 28, 2010

This rally's not dead yet, is it?

Stocks eased off this week. On Tuesday, it was more like a tumble than an easing but when the week was over major averages had given up roughly half a percent. After two weeks of strong gains, this was a bit of a disappointment but then it's not unexpected to see rallies pause now and then.

The question now is whether the rally can get back on track. We'll try to look for the most likely outcome in the following charts. They're derived from data collected during our Alert HQ process and they provide a high-level look at a number of the indicators we track across the whole market.

The view from Alert HQ --

Let's start with our moving average analysis.

SPY versus Moving Average Analysis, 02-26-2010

 For this first chart we count the number of stocks above various moving averages and count the number of moving average crossovers, as well. We scan roughly 7000 stocks and ETFs each weekend and plot the results against a chart of the SPDR S&P 500 ETF (SPY).

The chart above shows that the number of stocks above their 50-day moving average has decreased only slightly. The number of crossovers actually increased this week. So this doesn't seem like a picture of a market rolling over.

The next chart provides our trending analysis. It looks at the number of stocks in strong up-trends or down-trends based on Aroon analysis.

SPY versus Trend Analysis, 02-26-2010

Here we see that the number of stocks in downtrends decreased again this while the number of stocks in uptrends increased. Though the number of stocks in downtrends is beginning to approach extreme levels, the number of stocks in uptrends is no where near an extreme level. This implies that not only does this market still show some strength but it also appears that there is still room for further gains.

Conclusion --

As we review the charts above, it sure looks like this week's setback was minor.

In the physical sciences, they say that a body at rest tends to stay at rest and a body in motion tends to stay in motion unless acted upon by an outside force. This market is still in motion and the direction is still up. Barring any unforeseen shocks to the system from Greece, China or Washington, it still looks like this rally has some life left in it yet.



Simple value screen yields 8 more strong trending stocks

Here's another post where I ran my simple value screen against the Alert HQ database. Once again I included stocks that are on the Trend Busters list as well as those that are on the Trend Leaders list.

The screen looks for stocks with a reasonable valuation but also charts that are looking particularly attractive. Here are the criteria used for my loose value determination:

  • PE between 0 and 20
  • PEG between 0 and 1.3
  • Price-to-Sales less than 2
  • Debt-to-Equity less than 1
The following table is run against those stocks that were added to the Trend Leaders list this weekend after the close on Friday, Feb 26. The Trend Leaders list identifies those stocks where Aroon, MACD and Wilder's DMI are all bullish.

Symbol Name PE PEG Price To Sales Price To Book Debt To Equity
GPS GAP, INC. 14.42 1.23 1.00 2.84 0
TJX TJX COMPANIES, INC. (THE) 16.77 1.07 0.89 5.96 0.268
WST WEST PHARMACEUTICAL SERVICES, INC. 19.57 0.84 1.22 2.28 0.6947
PRE PARTNERRE LTD. 3.38 1.07 1.23 0.86 0.042
RDC ROWAN COMPANIES, INC. 7.25 0.50 1.47 0.98 0.2696
LINC Lincoln Educational Services Corporation 14.66 0.55 1.17 2.66 0.1679
NAFC Nash-Finch Company 8.65 0.81 0.09 1.15 0.8316
ROST Ross Stores, Inc. 15.53 0.93 0.87 5.47 0.1355

As I mentioned above, I also included those stocks who met the criteria for this screen and were also on the Trend Busters list. Only one stock qualified: Rowan Companies (RDC). As you can see, it is also listed above in the table of Trend Leaders. As the only stock on both lists, I'll choose RDC as the focus stock for today's post.

First, the technical analysis aspect. How can  the stock be on both the Trend Busters list and the Trend Leaders list? Look at the chart below:

Stock chart for RDC, 02-26-2010

The chart shows how Aroon, MACD and Wilder's DMI are all fairly bullish due to the generally rising stock price since early February. In addition, I have added a blue line that shows how the stock has finally broken above a downward-sloping trendline whose high point was established back in November.

Rowan Companies, Inc. provides a range of onshore and offshore contract drilling services in the United States and internationally. Besides providing drilling platforms and rigs, the company also designs and manufactures drilling equipment.

In terms of the company's value assessment, it has a very low PEG of only 0.50, a PE of only 7.5 and it is selling for less than book value. Not shown above, the Enterprise Value/EBITDA is less than 5 which reinforces the fact that this appears to be a deep value stock.

Below I have a chart of the financials for Rowan Companies:


Explore more RDC Data at Wikinvest

As you can see, RDC has seen declining revenues and earnings for the last few quarters. However, hope springs eternal among investors and the stock has been rising as it's earnings announcement approaches. The company is scheduled to hold its conference call on March 1 so we should see whether rising oil prices have translated into higher earnings for RDC. The company recently received an upgrade to BUY from MKM Partners but the average analyst estimate for earnings per share is only $0.50 so it is very possible investors will be disappointed again.

One thing that has been holding the company back is the fact that it does not offer deepwater rigs to its customers. Unfortunately, that is where the growth is as well as the highest dayrates for renting rigs. This means the company is missing out on one the better segments of the drilling business. As a result, the CEO earlier this month announced that the company plans to buy some ultra-deepwater rigs and also strengthen its grip on the market for high-end jackup rigs, their shallow-water counterparts. The CEO also alluded to possibly relocating the business outside the U.S. (it is currently based in Houston, TX) in order to obtain a lower tax rate.

With earnings due on Monday, we will quickly see whether the new-found bullishness in RDC will show any follow-through.

As a last word in today's post, I'd like to point out that a more conservative choice from the table above might be Nash-Finch Company (NAFC). The company is involved in food distribution and food service and their recent earnings were up 185% with revenues were up over 15% year-over-year. Yet they also trade in deep value territory while offering a 2% dividend yield.


Explore more NAFC Data at Wikinvest

Nash-Finch also announces earnings this week, on March 4th. Analyst estimates seem to call for slow and steady growth with modest improvement over the year ago quarter. With an easy comparison to last year's poor quarter, though, NAFC might very well beat expectations and move to new highs.

Disclosure: no positions in any stocks mentioned in this article



Saturday, February 27, 2010

Weekend Winners and Losers - Alert HQ BUY and SELL signals for February 26, 2010

Winners and LosersThis is our usual quick post announcing that the weekend's free stock signals are now available at Alert HQ.

Today we have the following stock picks and signals:

  • Based on daily data, we have 25 Alert HQ BUY signals and 8 SELL signals
  • Based on weekly data, we have 3 Alert HQ BUY signal and 21 SELL signals
  • We have 96 Bollinger Band Breakouts based on daily data and 181 Breakouts based on weekly data.
  • We have 777 Cash Flow Kings
  • 20 Swing Signals -- 15 BUY signals and 5 SELL Signals
  • 278 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 79 stocks that are new additions to the list and 46 that fell off the previous list.
  • 27 Trend Busters based on daily data of which 24 are BUY signals. We also have 52 Trend Busters based on weekly data.
  • 168 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. We see 84 downside gaps and 84 upside gaps based on daily data. We also have 56 Gap Signals based on weekly data.
The view from Alert HQ --

Stocks were weak on Monday and Tuesday (whew!, especially on Tuesday where averages were down 1.5%) and then spent the rest of the week struggling to recover. Though we ended the week slightly in the red, it was good to see the market fight back from such a significant deficit.

At Alert HQ, there are signs of returning bullishness in the faster moving indicators. BUY signals based on daily data are rising again, additions to the Trend Leaders list are increasing and BUY signals outnumber SELL signals on the Trend Busters and Swing Signals lists.

This is all good but our weekly Alert HQ reversal signals are still bearish and the weekly Trend Busters list has a big majority of SELL signals. The number of Gaps based on daily data are evenly split between upside and downside gaps.

The upshot of this assessment is that markets are leaning bullish again and next week there is a good, but not great, possibility that we will see further gains. So browse through Alert HQ and be ready if stocks do break out again to the upside!

Using our signals --

Visit Alert HQ to view or download your free lists of stock alerts. The alerts based on weekly data show those stocks that have exhibited some good follow-through after a recent trend reversal. If you want to be early in identifying the newest trend reversals, the lists based on daily data are for you.

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you have no faith in technical analysis, the Cash Flow Kings may be just what you are looking for. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas. See them all at Alert HQ.

Remember, we also provide our latest updated Swing Signals, Trend Leaders, Gaps and Trend Busters on Tuesday and Thursday nights.

Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Thursday, February 25, 2010

Tech investors have plenty to smile about -- Jan 2010 Durable Goods report

There was plenty of grumbling about the Advance Report on Durable Goods for January 2010 that was released today. The headline number showed new orders up 3% but ex-transportation, new orders were actually down 0.6%.

If you're overweight tech, like I am, though, you would be smiling happily.

I'll run through a few charts and you'll see why. Let's start by looking at shipments for the tech sector as a whole and than for the sub-sectors of computers, semiconductors and communications equipment.

Durable Goods Report, Tech Sector, Shipments for Jan-2010

Durable Goods Report, Computers, Shipments for Jan-2010

Durable Goods Report, Semiconductors, Shipments for Jan-2010

Durable Goods Report, Communications Equipment, Shipments for Jan-2010


You can see that shipments have surged over the last two months and, except for communications equipment, are reaching levels last seen in 2008 just before the worst of the Great Recession took its toll on the global economy. The tech sector as whole showed shipments up 8.5% and semiconductor shipments up over 32%

With the great improvement in shipments, it's disappointing to see Tech lagging other sectors like Materials and Consumer Discretionary. Some would argue, however, that shipments are in the past, and stocks move based on future performance.

If that's truly the case, Tech might still be the place to be. Take a look at these charts showing new orders.

Durable Goods Report, Tech Sector, New Orders for Jan-2010

Durable Goods Report, Computers, New Orders for Jan-2010

Durable Goods Report, Communications Equipment, New Orders for Jan-2010

You can see that new orders are quite strong, again reaching levels last seen in 2008. Though communication equipment is lagging the other sub-sectors, it too shows increasing orders.

Conclusion --

I have written several posts (here, here and here) on how the tech earnings scorecard this earnings season has been pretty darn strong. I have contended that tech stocks should be getting more investor interest. Today's Durable Goods report may, I think, begin to convert the unbelievers. I noticed that the NASAQ finished Thursday in better shape than the S&P 500 and the Dow. Are we seeing the beginning of an upsurge in tech?

Disclosure: long tech sector ultra ETFs ROM and USD



Alert HQ signals for Thursday, Feb 25, 2010

This post is announcing that Thursday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

Today we have the following:
  • 24 Swing Signals -- 13 BUY signals and 11 SELL Signals.
  • 245 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 68 stocks that are new additions to the list and 129 that fell off the previous list.
  • 23 Trend Busters of which 12 are BUY signals and 11 are SELL signals.
  • 158 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 85 are bearish gaps and 73 are bullish gaps.
The view from Alert HQ --

Things today seemed to conspire to send stocks down. The Durable Goods report was disappointing to many and jobless claims increased over the previous week, surprising economists who expected a decrease. After being down as much as 1.5% at mid-day, stocks turned up and finished the day down only slightly.

Finishing strong is an encouraging statement by this market. Thus, as I review tonight's Alert HQ signals, I see wisps of bullishness returning. Though the Swing Signals and Trend Busters lists are not very long, BUY signals do manage to eke out a small majority over SELL signals.

On the other hand, the Trend Leaders list has definitely shrunk, reflecting how the bullish action of the previous two weeks has seen its upward momentum eroded. And the last few days has also resulted in an increase in downside gaps.

Today's resurgence from steep losses on decent volume, though, suggests the market is ready resume a bullish attitude. If you've got some "dry powder", be sure to visit Alert HQ for some prime candidates for your Buy list.

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.

Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Tuesday, February 23, 2010

Alert HQ signals for Tuesday, Feb 23, 2010

This post is announcing that Tuesday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

Today we have the following:
  • 19 Swing Signals -- 7 BUY signals and 12 SELL Signals.
  • 304 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 134 stocks that are new additions to the list and 82 that fell off the previous list.
  • 28 Trend Busters of which 11 are BUY signals and 17 are SELL signals.
  • 165 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 78 are bearish gaps and 87 are bullish gaps.
The view from Alert HQ --

After two good weeks the market took it on the chin today. A worse than expected Consumer Confidence report was blamed for the downdraft. It was surprising to me that investors took it so seriously. With a raft of better than expected retail sales results coming out, it's hard to believe that this Consumer Confidence number was anything but an anomaly. Nevertheless, down we went today.

As a result, the Swing Signals and Trend Busters dried up. Of the few signals we have today, the majority are SELL signals.

On the positive side, the Trend Leaders list is hanging in there with a decent number of stocks and ETFs and, thankfully, they are not inverse ETFs. The Gap Analysis list shows more upside gaps than downside gaps, which is still at least a little bullish.

Over the weekend I wrote that the market was on the way to further gains but that its path would not be a straight line up. Today surely proved that point as markets took a real detour.

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.


Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Monday, February 22, 2010

What about beta?

In the new, soon-to-be released version of the TradeRadar software I will be more than quadrupling the number of fundamental indicators that will be evaluated for every stock. One of the indicators is beta.

In my research to determine how to evaluate beta in the program, I realized I needed a refresher course on what beta means for an investor. The following is the result of my investigation.

Definition --

The beta (β) of a stock or portfolio is a number describing the relation of its returns with that of the financial market as a whole.

It tells you how fluctuations in the return of a stock co-vary with an index, often the S&P 500.

An asset with a beta of 0 means that its price is not at all correlated with the market. A positive beta means that the asset generally follows the market. A negative beta shows that the asset inversely follows the market; the asset generally decreases in value if the market goes up and vice versa.

Another way of distinguishing between beta and correlation is to think about direction and magnitude. If the market is always up 10% and a stock is always up 20%, the correlation is one (correlation measures direction, not magnitude). However, beta takes into account both direction and magnitude, so in the same example the beta would be 2 (the stock is up twice as much as the market).

Beta has no upper or lower bound, and betas as large as 3 or 4 will occur with highly volatile stocks.

Beta can be quite important, but it is often completely misused. It is often referred to as a measure of risk. If you want to know how risky an investment is, look at the volatility directly.

Examples --

Consumer Staples stocks are thought to be less affected by cycles and usually have lower beta (often between 0 and 1). Procter & Gamble, which makes soap, is a classic example. Other similar ones are Philip Morris and Johnson & Johnson. Utility stocks are thought to be less cyclical and have lower beta as well, for similar reasons.

Tech stocks typically have higher beta. An extreme example for the tech sector is the dot-com bubble. Tech outperformed everything in sight in the late 1990s but it also cratered in the early 2000s, worse than the overall market.

Many precious metals and precious-metal-related stocks are beta-negative as their value tends to increase when the general market is down and vice versa.

Beta can be zero. Some zero-beta assets are risk-free, such as cash. Some used to consider Treasury bonds to be zero-beta, risk free assets though during the dark days of 2008 and early 2009, one could make the argument that treasury bonds had a negative beta as investors fled the stock market and bought Treasury bonds for their perceived safety. Which goes to show you that beta can change drastically depending on market conditions.

Using beta to match your tolerance for risk --

Many people are extremely reluctant to take losses and therefore opt for investments with low volatility. Other people are willing to take on additional risk because with it they receive the possibility of increased reward. Which one are you?

It is very important that investors not only have a good understanding of their risk tolerance, but also know which investments match their risk preferences. Beta can help.

By using beta to measure volatility, you can better choose those securities that meet your criteria for risk. Investors who are very risk averse should put their money into investments with low betas such as utility stocks and Treasury bills. Those investors who are willing to take on more risk may want to invest in stocks with higher betas.

Beta can also be used in portfolio management to adjust the risk profile of the overall portfolio. For an investor who has a "somewhat" risk-averse attitude, a high percentage of the portfolio could be allocated to low beta securities and a small percentage could be used to chase superior returns via high beta stocks that are more prone to volatile market movements.

Calculating beta --

As described above, beta is defined as the relative volatility of a stock’s returns compared to those of the market. We can use a simple line to represent this relationship. You might remember from your high school geometry that the formula for a straight line is y = a + bx. In this case, we replace the b with the Greek beta.

We use a stock’s returns as the dependent variable or Y and the returns from the S&P 500 as the independent variable or X. The steeper the line, the higher the beta. See the chart below.


The beta we calculate is historical, though we often use it to estimate the required return for the stock into the future. Since the calculation of beta uses past prices, there is a limit to how useful it is to project beta too far into the future. You know that phrase that every mutual fund advertisement uses: "Past returns are no guarantee of future returns". Beta is subject to the same kind of caveat.

Conclusion --

From the point of view of determining whether a stock's beta is acceptable, there are a several things to look at.
  • Is the stock's beta consistent with the industry sector? A utility stock with a high beta has something going on and investors should be cautious. Likewise, a tech stock with a low beta implies its high-growth period may be behind it.
  • Is the stock's beta consistent with an investor's risk tolerance? For investors who fear volatility, a high beta investment requires that the investor make a very careful evaluation of the stock in order to be comfortable holding that stock. Or the investor may want to reject the stock altogether as a potential investment.
  • An investor's time horizon is important. Investors need to make a distinction between short-term risk -- where beta and price volatility are useful -- and longer-term, fundamental risk, where big-picture risk factors are more telling. High betas may mean price volatility over the near term, but they don't always rule out long-term opportunities.
Taking these factors into consideration can make it easier for an investor to assess the beta of a potential investment. Needless to say, beta should never be the only criteria used to gauge the suitability of an investment but it can be an important consideration.

I hope this post makes it easier for you to use beta in your own investing.



Sunday, February 21, 2010

Reviewing the charts -- can this rally last?

If you're wondering whether the current rally has legs, I'd like to submit the following charts. They're derived from data collected during our Alert HQ process and they provide a high-level look at a couple of the indicators we track across the whole market.

The view from Alert HQ --

Let's start with our moving average analysis.


For this first chart we count the number of stocks above various moving averages and count the number of moving average crossovers, as well. We scan roughly 7000 stocks and ETFs each weekend and plot the results against a chart of the SPDR S&P 500 ETF (SPY).

The yellow line has crossed above the magenta line. This is a clearly bullish development as the number of stocks above their 50-DMA has moved above the number of stocks whose 20-DMA is over their 50-DMA. We almost always see stocks advancing when this situation occurs. In addition, please note that well more than half of stocks are now above their 50-DMA which is a big improvement over the last couple weeks.

The next chart provides our trending analysis. It looks at the number of stocks in strong up-trends or down-trends based on Aroon analysis.


With the red line plunging, we know that the number of stocks in down-trends has decreased rapidly. Conversely, the number of stocks in up-trends (the yellow line which has turned up after recently bottoming out) is clearly increasing.

The outlook --

These charts show that stock market gains have been strong and broad-based. These charts also show that stocks have not yet reached bullish extremes. Indeed, I keep reading that bearish sentiment is alive and well despite two weeks of decent advances in the stock market.

This leads me to think this rally does indeed have legs. It may not be a straight-line run to new highs but I'm feeling confident that stocks will see at least another couple weeks of solid gains. And that could get us to some new highs for 2010.



Saturday, February 20, 2010

Is it the real thing for REITs this time?

This weekend I have a bigger than usual list of Alert HQ BUY signals based on daily data so I began to browse through them. Clicking on the column headings allows you to sort by that data element. I started by  sorting by Signal Strength. I was surprised to see a bunch of REITs at the top of the list.

After spending last fall in a trading range, many REITs surged into the end of December and then fell back in the new year.They now appear to be making an effort to climb back to new highs.

I'm no expert in the fundamental analysis of REITs. What I can say is that it's worth paying attention when an entire sector begins to move. Here is the list of REITs that are on this weekend's buy list:

Symbol Name Signal Strength Dividend Yield
ARE ALEXANDRIA RE EQUITIES 99% 2.27%
AVB AVALONBAY COMMUNITIES 99% 4.53%
BXP BOSTON PROPERTIES, INC. 91% 3.00%
FIO ISHARES FTSE NAREIT INDUSTRIAL/OFFICE CAPPED INDEX FUND 88% N/A
FRT FEDERAL REALTY INV. TRUST 99% 3.85%
FTY ISHARES FTSE NAREIT REAL ESTATE 50 INDEX FUND 97% N/A
HIW HIGHWOODS PROPERTIES,INC. 99% 5.71%
HR HEALLTHCARE REALTY TRUST 72% 5.76%
IYR ISHARES DJ US REAL ESTATE 96% N/A
PPS POST PROPERTIES, INC. 86% 4.31%
PSR POWERSHARES ACTIVE U.S. REAL ESTATE FUND 87% N/A
REZ ISHARES FTSE NAREIT RESIDENTIAL PLUS CAPPED INDEX FUND 96% N/A
RTU COHEN & STEERS REIT AND UTILITY INCOME FUND, INC. 96% 13.21%
UBP URSTADT BIDDLE PROPERTIES 68% N/A
URE PROSHARES ULTRA REAL ESTATE 99% N/A
VNQ VANGUARD REIT ETF 92% N/A
IFNA iShares FTSE EPRA/NAREIT North America Index Fund 86% N/A

Count 'em up and there are 18 REITs generating BUY signals this weekend. Most of them have pretty strong signal strength. Many, though not all, have broken out above their downward-sloping trendline. Here, as an example, is the ISHARES DJ US REAL ESTATE ETF (IYR) whose holdings include a selection of REITS:

IYR

There's a lot of interesting stuff going on with this chart. This ETF has broken above it's trend line and moved above both it's 20-day and 50-day moving average. MACD is bullish and the 200-day moving average is heading upward. All of that is bullish from an intermediate-term point of view.

From a short-term point of view, both the Slow Stochastics and Williams %R indicate this ETF is well over-bought. This suggests a pullback could be in the offing though not necessarily right away. This rally could last for weeks if the overall market is doing decently.

This next chart is of an actual REIT rather than an ETF. It is for AVALONBAY COMMUNITIES (AVB):

AVB

As you can see, this REIT shows pretty much all the same characteristics as the ETF.

Conclusion --

So even with all the constant reminders of banks stuck with bad commercial real estate loans, it seems investors are focusing on the positive. The attitude must be that the larger properties, the kind that typically make up the majority of holdings in REITs and ETFs, have seen the worst of the downturn, offer value at this point and will benefit from a slowly improving economy.

For those who are comfortable with REITS, it looks like the BUY signal is here. And note that quite a few of them offer decent dividend yields.

Disclosure: none



Weekend Winners and Losers - Alert HQ BUY and SELL signals for February 19, 2010

This is our usual quick post announcing that the weekend's free stock signals are now available at Alert HQ.

Today we have the following stock picks and signals:

  • Based on daily data, we have 120 Alert HQ BUY signals and 7 SELL signals
  • Based on weekly data, we have 3 Alert HQ BUY signal and 22 SELL signals
  • We have 93 Bollinger Band Breakouts based on daily data and 169 Breakouts based on weekly data.
  • We have 778 Cash Flow Kings
  • 14 Swing Signals -- 11 BUY signals and 3 SELL Signals
  • 254 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 85 stocks that are new additions to the list and 26 that fell off the previous list.
  • 83 Trend Busters based on daily data of which 75 are BUY signals. We also have 36 Trend Busters based on weekly data.
  • 192 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. We see 81 downside gaps and 111 upside gaps based on daily data.  We also have 56 Gap Signals based on weekly data.
The view from Alert HQ --

We've now had two weeks of bullish action since the "near-correction" bottomed February 5th. As a result, Alert HQ signals continue steadfastly bullish.

While the fastest moving signals suggest a pause, the slower moving signals continue to show gathering strength. For example, the the fast moving Swing Signals list is shrinking while the lagging Trend Leaders list is still expanding. Those signals which don't use any smoothing or moving averages, the Trend Busters and Gap Analysis signals, for instance, also show continued strength and a clear tilt toward bullishness with upside breakouts in the distinct majority.

With the market shrugging off the Fed's discount rate increase, the panic over Greece subsiding and the craziness of earnings season about at an end, this market is poised for further gains. We have lots of candidates for your watch lists available today. Check them out right now!

Using our signals --

Visit Alert HQ to view or download your free lists of stock alerts. The alerts based on weekly data show those stocks that have exhibited some good follow-through after a recent trend reversal. If you want to be early in identifying the newest trend reversals, the lists based on daily data are for you.

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you have no faith in technical analysis, the Cash Flow Kings may be just what you are looking for. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas. See them all at Alert HQ.

Remember, we also provide our latest updated Swing Signals, Trend Leaders, Gaps and Trend Busters on Tuesday and Thursday nights.

Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Thursday, February 18, 2010

Rebound slowing but not over yet -- Alert HQ signals for Thursday, Feb 18, 2010

This post is announcing that Thursday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

Today we have the following:
  • 33 Swing Signals -- 28 BUY signals and 5 SELL Signals.
  • 195 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 100 stocks that are new additions to the list and 16 that fell off the previous list.
  • 93 Trend Busters of which 85 are BUY signals and 8 are SELL signals.
  • 217 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 94 are bearish gaps and 123 are bullish gaps.
The view from Alert HQ --

The rebound continued today but progress was halting. It appears the initial surge is slowing down. Though all of our lists of stock picks are definitely bullish, the decrease in Swing Trading Signals is an early warning sign. Oh well, markets never go straight up.

Today the Fed announced a modest increase to the discount rate and investors will probably take that as a cue to sell stocks, interpreting this as the beginning of a rate tightening cycle. They may be premature in taking this attitude but the timing is right for stocks to take a rest after a week of good gains.

In the meantime, Alert HQ has a good selection of stocks that might help you play the rebound. If markets drop Friday, it may just provide a better entry point. Our indicators suggest this rally is still alive and well.

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.

Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Wednesday, February 17, 2010

Reasonable value and attractive charts - 8 stocks you should know about

I ran my simple value screen against the Alert HQ database again yesterday. This time I included stocks that are on the Trend Busters list as well as those that are on the Trend Leaders list.

The screen looks for stocks with a reasonable valuation but also charts that are looking particularly attractive. Here are the criteria used for my loose value determination:

  • PE between 0 and 20
  • PEG between 0 and 1.3
  • Price-to-Sales less than 2
  • Debt-to-Equity less than 1
This first table is based on those stocks that meet the value criteria and are on the Trend Busters list. This list identifies stocks via automated chart analysis that are breaking out above a trend line. The following five stocks popped out when looking at the breakouts registered on Tuesday, Feb 16:

Symbol Name PE PEG Price To Sales Price To Book
CORE Core-Mark Holding Company, Inc. 7.19 0.47 0.07 1.02
FDEF First Defiance Financial Corp. 12.81 1.31 1.1 0.4
CRMT America's Car-Mart, Inc. 13.2 0.75 0.91 1.69
KND KINDRED HEALTHCARE, INC. 15.92 0.99 0.16 0.71
USPH U.S. Physical Therapy, Inc. 16.14 1.12 0.93 2.13


This next table is based on the same value screen but it is run against those stocks that were added to the Trend Leaders list on Tuesday, Feb 16. The Trend Leaders list identifes those stocks where Aroon, MACD and Wilder's DMI are all bullish.

Here is the list of four stocks that made the grade:

Symbol Name PE PEG Price To Sales Price To Book
CORE Core-Mark Holding Company, Inc. 7.19 0.47 0.07 1.02
ALGT Allegiant Travel Company 13.98 0.87 1.87 3.71
NUS NUSKIN ENTERPRISES, INC. 18.7 1.24 1.24 4.38
OMI OWENS & MINOR, INC. 19.94 1.06 0.23 2.48

One of the interesting aspects is that Core-Mark Holding Company (CORE) is on both lists. This is the second time they been broken above a short-term trend line (the blue and green downward sloping lines that start at the peak in early January on the following chart) and the overall aspect of the stock chart is that the stock is in a nice intermediate to long-term up-trend (as shown by the upward sloping magenta line).


Core-Mark Holding Company, Inc. seems to be a mundane small-cap with a modest single-digit annual growth rate. CORE operates as a wholesale distributor of packaged consumer products to the convenience retail industry. The company serves traditional convenience stores, grocery stores, drug stores, liquor stores, and other stores that carry convenience products. As of December 31, 2008, it operated a network of 26 distribution centers in the United States and Canada.

After a poor quarter in 2Q2009, the company doubled its earnings in 3Q2009 though on a very modest increase in revenue. Investors seem hopeful that 4Q earnings will be similarly solid. Adding to the anticipation, the company recently projected 2010 revenues of $6.9 billion which would be a 6% increase over 2009.

So this is not exactly a company that is on fire but looking at the value indicators it does look like a company that has been undervalued by this market. Not shown, but also indicating low valuation, the Enterprise Value/EBITDA ratio is only 3.5 and that is generally considered to be a level indicating deep-value.

Note: I apologize for publishing this post a day late. A few of these stocks made dramatic gains today.

Disclosure: no positions



Tuesday, February 16, 2010

Optimism returns -- Alert HQ signals for Tuesday, Feb 16, 2010

This post is announcing that Tuesday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

Today we have the following:
  • 116 Swing Signals -- 114 BUY signals and 2 SELL Signals.
  • 111 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 48 stocks that are new additions to the list and 33 that fell off the previous list.
  • 91 Trend Busters of which 80 are BUY signals and 11 are SELL signals.
  • 202 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 83 are bearish gaps and 119 are bullish gaps.
The view from Alert HQ --

It's good to see all our lists of stock picks are so bullish. The Swing Signals and Trend Busters lists have BUY signals way, way outnumbering SELL signals. The Trend Leaders list is starting to turn around and is now growing. Finally, we are again seeing more upside gaps than downside gaps.

All of this implies that this market has more gains in store. Last week it looked like the near-correction we had been experiencing  was coming to an end. Today's action seems to confirm the new bullish trend. As stocks begin to reverse to the upside, the downward trend lines are being broken. And the gains seem to be broad-based.

If you taken a chance on a few of our picks from last week you would have made money already. We've got a growing selection of BUY signals and it's not too late to jump on one!

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.

Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Saturday, February 13, 2010

Weekend Winners and Losers - Alert HQ BUY and SELL signals for February 12, 2010

This is our usual quick post announcing that the weekend's stock signals are now available at Alert HQ.

Today we have the following stock picks and signals:

  • Based on daily data, we have 44 Alert HQ BUY signals and 13 SELL signals
  • Based on weekly data, we have 5 Alert HQ BUY signal and 75 SELL signals
  • We have 72 Bollinger Band Breakouts based on daily data and 149 Breakouts based on weekly data.
  • We have 823 Cash Flow Kings
  • 86 Swing Signals -- 85 BUY signals and 1 SELL Signals
  • 96 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 35 stocks that are new additions to the list and 18 that fell off the previous list.
  • 34 Trend Busters based on daily data of which 27 are BUY signals. We also have 115 Trend Busters based on weekly data.
  • 165 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. We also have 43 Gap Signals based on weekly data.
The view from Alert HQ --

A week can sure make a difference in this market. Last week's post referred to SELL signals piling up all over the place. I'm happy to report that this week's post can point to a resurgence in BUY signals.

The fastest moving signals are firmly bullish now. Swing Signals, Trend Busters and the Alert HQ signals based on daily data are all showing a big majority of BUY signals and very few SELL signals. We are seeing that the majority of gaps these days are to the upside.

The slower moving indicators like the Trend Leaders are lagging. The Trend Leaders list has stopped shrinking but it has a long way to go before it hits levels we are used to seeing during rallies. The Alert HQ signals based on weekly data are likewise not as bad as they were but are still showing significant numbers of SELL signals.

All in all, it looks like the ship is slowly changing course but, to mix metaphors, we are not out of the woods yet. So many stocks, despite turning up this week, still have to convincingly break above their 50-day moving averages. Whereas the 50-DMA used to provide support, now it provides resistance.

In any case, I am hopeful that this pullback is nearing its end. If our analysis is correct, many stocks are at good entry points now and Alert HQ has identified those that are on the move. Don't invest without checking Alert HQ first!

Using our signals --

Visit Alert HQ to view or download your free lists of stock alerts. The alerts based on weekly data show those stocks that have exhibited some good follow-through after a recent trend reversal. If you want to be early in identifying the newest trend reversals, the lists based on daily data are for you.

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you have no faith in technical analysis, the Cash Flow Kings may be just what you are looking for. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas. See them all at Alert HQ.

Remember, we also provide our latest updated Swing Signals, Trend Leaders, Gaps and Trend Busters on Tuesday and Thursday nights.

Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Thursday, February 11, 2010

Alert HQ signals for Thursday, Feb 11, 2010

This post is announcing that Thursday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

Today we have the following:
  • 208 Swing Signals -- 207 BUY signals and 1 SELL Signal.
  • 79 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 24 stocks that are new additions to the list and 44 that fell off the previous list.
  • 37 Trend Busters of which 25 are BUY signals and 12 are SELL signals.
  • 168 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 72 are bearish gaps and 96 are bullish gaps.
The view from Alert HQ --

On Tuesday I thought the bulls were returning and today they seem to have arrived. Markets moved up nicely as the dollar moved down thanks to potential defusing of the Greek sovereign debt issue. Also reported today, initial jobless claims decreased more than expected and that provided added support for stocks.

On Tuesday I pointed out that it was hard to find confirming signals beyond the Swing Trading Signals list. Today, things are looking a bit better. Not only is the Swing Trading Signals list bursting with BUY signals, we also have the Trend Leaders with a very good proportion of BUY signals. The majority of gaps detected over the last few days have been to the upside. Taking a contrary point of view, the Trend Leaders list has sunk about as low as it has ever gotten; I can't help but think a nice bounce is store if not a resumption of the bull market.

I encourage you to set some time aside to look through our Swing Signals. There are over 200 of them today so roll up your sleeves and find yourself a stock or ETF you can ride to new highs!

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.

Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Wednesday, February 10, 2010

Gabelli and Morgan Stanley go for tech - here's why I agree

Earnings season has nearly run its course and, judging by stock prices, investors seem to be disappointed. Today I'll provide an update to my tech stock earnings scorecard and see what it tells us about the tech sector, where it's been and where it might  be going.

Again, I'll refrain from publishing all the data in tabular form and just provide summaries of a number of measures. Note that I have captured data on 332 stocks  so far and percentages referenced below are based on this total number.

Earnings --

  • 256 stocks beat First Call estimates which amounts to 77%
  • 104 of those stocks beat earnings estimates by 20% or more or almost one third
  • 209 stocks or nearly two thirds showed at least some year-over-year earnings growth whether they beat estimates or not
  • 83 have shown year-over-year growth in earnings of 20% or more
Revenue --
  • 205 stocks have shown year-over-year revenue growth. That amounts to about 62%
  • 78 have shown revenue growth of 20% or more
Guidance --
  • 116 have provided upside guidance which amounts to about 55% of the 209 companies that provided guidance. 
  • 82 others provided mixed or in-line guidance.
  • Only 11 stocks offered downside guidance
My interpretation of the results of this earnings season is that tech is in fine shape. Earnings have been decent to very good. A significant number of companies have shown top-line growth, suggesting that the era of earnings derived solely from cost-cutting is drawing to a close.

More importantly, the outlook from those companies that provided guidance is fairly positive. Very few companies projected poor expectations. This bodes well for the tech sector.

Confirmation --

I am not alone in my enthusiasm for the tech sector. Mario Gabelli's Gamco Investors is also bullish on tech. According to an article on Bloomberg, Gamco's Howard Ward is expecting tech (especially Apple and Google) to rally after technology companies in the Standard & Poor’s 500 Index fell 7.8 percent this year through last week and bearish options on chipmakers rose to the highest level since 2003. Gabelli’s firm says lower valuations will offset more than $560 million of redemptions from global technology funds at the end of January, a 71-week high. You may have noticed that semiconductor ETFs have indeed been recovering lately and one or two showed up on our Swing Trading Signals list on Tuesday.

Also according to Bloomberg, technology stocks, whose 60 percent increase was the biggest among 10 industries in the S&P 500 last year, have slumped 7.8 percent in 2010 for the third-largest decline. This is despite the fact that 256 out of 332 companies that reported since January 11 exceeded analysts’ estimates.

Bloomberg goes on to say "The number of bearish options on the Semiconductor HOLDRs Trust jumped to 1.71 times bullish contracts at the end of January, a six-year high, even though fourth-quarter earnings at S&P 500 companies are poised to rise 78 percent from a year ago, the biggest jump on record, data compiled by S&P and Bloomberg show. Profits are breaking a nine-quarter streak of declines."

As further confirmation of our bullish take on technology, Morgan Stanley estimates that 38 percent of the companies it follows intend to raise capital spending over the next three months, up from a low of 3 percent in August, according to a January 15 survey from the New York-based bank.

Valuations still attractive --

Technology stocks trade at 12.8 times estimated profit for 2011, half the median valuation since 1994, data compiled by Bloomberg show. Technology shares in the S&P 500 trade for 18.5 times profits in the last 12 months, compared with 25.8 when the U.S. market peaked in the fourth quarter of 2007.

So in my opinion, the tech sector is poised to resume its leadership role when stocks come out of the current downturn. Valuations are not exaggerated and forward guidance from company management suggests technology industry fundamentals will continue to improve. This pullback looks to me like a gift - an opportunity to buy tech stocks at reasonable prices.

If you want diversification, there are numerous ETFs available that cover the whole tech sector including, among others, XLK and IYW. If you wish to focus on sub-sectors, there are ETFs for semiconductors (IGW), networking (IGN),  software (IGV), Internet (HHH, FDN) and more. If you are looking for more juice, there are 2x leveraged ETFs from ProShares: ROM is a general tech ETF, USD is the semiconductor ETF and LTL is the telecommunications ETF.

Disclosure: long ROM and USD



Tuesday, February 9, 2010

The Bulls are back but will they stick around? -- Alert HQ signals for Tuesday, Feb 9, 2010

This post is announcing that Tuesday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

Today we have the following:

  • 188 Swing Signals -- 184 BUY signals and 4 SELL Signals.
  • 99 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 16 stocks that are new additions to the list and 25 that fell off the previous list.
  • 35 Trend Busters of which 14 are BUY signals and 21 are SELL signals.
  • 196 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 105 are bearish gaps and 91 are bullish gaps.
The view from Alert HQ --

Last Tuesday I titled the post "The bulls are back!" That was based on the huge number of Swing Trading BUY signals we found. Here we are again on a Tuesday with a rally in the stock market and a pretty sizable list of Swing Signals.

The question today is whether the Swing Signals are delivering another head fake, like last week, or whether they are an indication of returning investor optimism.

Frankly, looking for bullish confirming indicators is troubling. The rest of the Alert HQ signals are still tilting in a bearish direction. Even the stocks that showed up as BUYs on the Swing Signals list have yet to show a significant breakout above their downward-sloping trend lines.And yet, with stocks so over-sold a bounce seems inevitable. And it seems as if tech has been regaining favor over the last few days. Tech is always an important component of any rally attempt so I believe this bodes well for further gains. Combine this with the news today that Germany is considering assistance for Greece and we have the potential for investors to breath a sigh of relief and bid up stocks.

All in all, it's hard to advise that it's time to jump into the market with both feet but it's worth noting that we are at support levels and the market rallied while economic reports kept coming through with improvements. According to Bloomberg, for example, China exports increased 21% and imports jumped 81%. There must be some significant economic activity going on somewhere to cause those numbers.

So my suspicion is that the Swing Signals list shows the first of those stocks and ETFs that are going to benefit from an overdue bounce in the market. Another set of early movers can be found among the BUY signals on the Trend Busters list. Be sure to check them out today!

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.

Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Sunday, February 7, 2010

Can you still be a bull when this market's technicals are so awful?

The family wants me to watch the Super Bowl with them and stop this darn blogging. And you know, I think that's a pretty good idea so I'm just going provide a really abbreviated post that looks at our Alert HQ overall market statistics.

The following charts are derived from data collected during our Alert HQ process and they provide a high-level look at a couple of the indicators we track across the whole market.

The view from Alert HQ --

Let's start with our moving average analysis.


For this first chart we count the number of stocks above various moving averages and count the number of moving average crossovers, as well. We scan roughly 7000 stocks and ETFs each weekend and plot the results against a chart of the SPDR S&P 500 ETF (SPY).

This chart shows the broad-based deterioration in the market. Almost 70% of stocks are now below their 50-DMA. The number of cross-overs to the downside has accelerated. I don't show it on the charts but roughly 75% of stocks have fallen below their 20-DMA, as well. We are midway between the extreme levels as we saw in March 2009 and the levels we saw during the two pullbacks in 2009.

The next chart provides our trending analysis. It looks at the number of stocks in strong up-trends or down-trends based on Aroon analysis.


This chart tells a similar story. Current levels are midway between those seen at the market lows in March and during the pullbacks in September and November.

Conclusion - why I'm still a bull

OK, I have to ask: should the market be sinking to levels last seen when the fate of capitalism was in doubt and the financial system was teetering on the brink? I don't think so.

So the interpretation of these charts is that the market is greatly oversold. Unfortunately, markets can continue in an oversold mode until some catalyst changes investor sentiment. Luckily, we continue to see modest progress in U.S. economic reports. Improving fundamentals will eventually carry the day. As I said a week ago: do not short this market unless you're a trader.



Dividends save the day -- 10 stocks with strong up-trends and dividend growth

Everyone is aware that the market has been going through some tough times for the last few weeks. Major averages are off their peaks roughly 7% and a full-fledged 10% correction or worse is not out of the question.

It turns out, however, that not every stock is taking a dive. I ran a screen that that looks at the Trend Leaders list at Alert HQ and looks for which stocks have increased their dividends. These dividend growers seem to be practically impervious to the downturn. And they stand out because so many others on the Trend Leaders list these days are inverse ETFs.

Here is the list of 10 dividend growers that are exhibiting strong up-trends on their stock charts. Note that in order to be on the Trend Leaders list a stock has to show strong results in all three indicators: Aroon, DMI and MACD.

Symbol Name Dividend TTM New Dividend % Increase
MTR MESA ROYALTY TRUST 2.169 3.43 58.14%
NRGP Inergy Holdings, L.P. 3.32 3.76 13.25%
NOC NORTHROP GRUMMAN CORP. 1.69 1.72 1.78%
MCD MCDONALDS CORPORATION 2.05 2.2 7.32%
DV DEVRY, INC. 0.18 0.20 11.11%
ARG AIRGAS, INC. 0.70 0.88 25.71%
LANC Lancaster Colony Corporation 1.16 1.20 3.45%
LSBX LSB Corporation 0.22 0.28 27.27%
PRGO Perrigo Company 0.23 0.25 8.70%
TESS TESSCO Technologies Incorporated 0.20 0.40 100.00%

Here's a few comments on some of the stocks on this list:
  •  MESA ROYALTY TRUST (MTR) is benefiting from solid performance of its oil and gas properties
  • Inergy Holdings, L.P. (NRGP) has been absolutely relentless in its march upward. It is also involved in energy and operates in the entire supply chain for natural gas, from processing to sales to retail customers.
  • DeVry (DV) has actually broken out to the upside as it pretty much ignores the downturn. It may be in line to benefit from the administration's proposed higher education plans.
  • Airgas (ARG) just received a $1.5 billion takeover offer from Air Products & Chemicals (APD) so I'm not the only one seeing value here
  • Lancaster Colony Corporation (LANC) just reported higher earnings and has also broken out to the upside
  • LSB Corporation (LSBX) is a regional bank - not much news just conservative management and the ability to raise the dividend rather than look for government handouts
  • Perrigo Company (PRGO) is another stock with a relentless up-trend. This healthcare stock is benefiting from good earnings and analyst upgrades.
  • TESSCO Technologies Incorporated (TESS) has been on a tear since early December. The company just reported good quarterly earnings and is the only tech stock on this list.
Dividends can provide investors comfort when a stock is pulling back. These ten stocks have avoided the recent market pullback and are boosting dividends, to boot. Not a bad combination.



Saturday, February 6, 2010

Weekend Winners and Losers - Alert HQ BUY and SELL signals for February 5, 2010

This is a little different than the usual quick post announcing that the weekend's stock signals are now available at Alert HQ. I wanted to announce that I have made some changes to how some of the signals are generated.

I have blended a calculation of Slow Stochastics into the determination of the Swing Trading Signals. Slow Stochastics is another approach to determining when a stock is moving from being over-bought and into a decline or from being over-sold and then into a rally. Combined with the Bollinger Band analysis and Williams %R calculations that were already in place, the Swing Trading Signals should be more reliable. There may also be fewer signals generated on any particular day now that the criteria have become a little more stringent.

There has also been an improvement in the way we identify Trend Busters. The algorithm is now more precise and determining when the stock price broke above or below the trend line has become more accurate. The result is that you will likely see a larger number of stocks on the Trend Busters list.

This weekend's signals --

Today we have the following stock picks and signals:

  • Based on daily data, we have 6 Alert HQ BUY signals and 252 SELL signals
  • Based on weekly data, we have 5 Alert HQ BUY signal and 180 SELL signals
  • We have 93 Bollinger Band Breakouts based on daily data and 175 Breakouts based on weekly data.
  • We have 827 Cash Flow Kings
  • 28 Swing Signals -- 24 BUY signals and 3 SELL Signals plus one Strong BUY
  • 108 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 19 stocks that are new additions to the list and 28 that fell off the previous list.
  • 104 Trend Busters based on daily data of which only 7 are BUY signals. We also have 323 Trend Busters based on weekly data.
  • 46 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. We also have 204 Gap Signals based on weekly data.
The view from Alert HQ --

Well, the SELL signals keep piling up and it's no surprise. Major averages suffered another down week, especially the Russell 2000 which was off 1.5%.

Friday, however, stocks finished strong in the last hour and this provided a little juice for our Swing Signals list which actually shows a good number of BUY signals. Elsewhere, BUY signals are few and far between and those that do show up are all the more notable for doing so. Many are driven by earnings news and that's the best kind of underpinning for a rally.

So as this market teeters on the edge of a correction, maintain a position of caution. But keep an eye on our Alert HQ signals and make sure you have a few good candidates to invest in when it's time to get back into this market.

Using our signals --

Visit Alert HQ to view or download your free lists of stock alerts. The alerts based on weekly data show those stocks that have exhibited some good follow-through after a recent trend reversal. If you want to be early in identifying the newest trend reversals, the lists based on daily data are for you.

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you have no faith in technical analysis, the Cash Flow Kings may be just what you are looking for. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas. See them all at Alert HQ.

Remember, we also provide our latest updated Swing Signals, Trend Leaders, Gaps and Trend Busters on Tuesday and Thursday nights.

Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Thursday, February 4, 2010

Vicious selloff slaps TradeRadar - Alert HQ for Thursday, Feb 4, 2010

This post is announcing that Thursday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

Today we have the following:
  • 5 Swing Signals -- 4 BUY signals and 1 SELL Signal.
  • 117 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 47 stocks that are new additions to the list and 48 that fell off the previous list.
  • 19 Trend Busters of which 3 are BUY signals and 16 are SELL signals.
  • 221 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 123 are bearish gaps and 98 are bullish gaps.
The view from Alert HQ --

With almost all other Alert HQ indicators looking pretty bearish, we got a huge surge of BUY signals on our Swing Trading signals list on Tuesday. This was the result of a couple of good days that allowed stocks to bounce off their lower Bollinger Band. I read this as a precursor to a rally and predicted that stocks might begin to recover after two weeks of declines.

After today's action, though, it looks more like those Swing Signals were a head fake. Markets fell a good 3% today and it was a reality slap for TradeRadar. One of the rules of technical analysis is that if you have a promising signal, you should ensure you have confirmation from another indicator. I guess we've proved that you need more than just a batch of Swing Signals to call a rally when everything else is looking weak.

Well, things are pretty bearish across the board now at Alert HQ. It's almost surprising that we have any BUY signals when the short-term direction in the stock market has been so severely down.

Friday brings the Non-Farm Payrolls report. This might be a last chance for redemption for this market. An upside surprise should halt the slide, a bad report would likely hasten the decline. As I write this, the Nikkei is down over 2% so the morning will dawn in the U.S. with a gloomy cast. If you haven't been stopped out yet (as I have in a few positions) then be careful and watch those support levels!

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.


Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Tuesday, February 2, 2010

The Bulls are back! -- Alert HQ signals for Tuesday, Feb 2, 2010

This post is announcing that Tuesday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

Today we have the following:
  • 627 Swing Signals -- 623 BUY signals and 2 SELL Signals plus 2 Strong BUYs.
  • 116 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 38 stocks that are new additions to the list and 64 that fell off the previous list.
  • 28 Trend Busters of which 13 are BUY signals and 15 are SELL signals.
  • 188 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 77 are bearish gaps and 111 are bullish gaps.
The view from Alert HQ --

The bulls are back in town!

On a number of occasions I've written about the Swing Trading Signals and how a big showing of BUY signals on the Swing Signals list is often a precursor to a rally. Well, tonight we sure got a big showing! Usually we have 25 to 40 stocks on a Swing Trading list but tonight we have over 600. Now that is a bullish statement!

It is clear that after the last two weeks of declines, stocks are bouncing hard off their lower Bollinger Bands and stoking the Swing Trading Signals list. But that's not the only bullish indication. We're seeing more upside gaps than downside gaps. The Trend Busters list has a been a mess lately but we're starting to see BUY signals return here, too. Finally, the Trend Leaders list, our slowest moving signal, has dwindled down to about as low a level as it ever gets.

If Friday's Non Farm Payrolls report cooperates, I'm thinking this market could be off to the races.

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.

Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Monday, February 1, 2010

Tech sector earnings scorecard - tech still can't get no respect

Last week I posted my first tech earnings scorecard for this earnings season. Tonight's results are a continuation of the theme.

This week I added a couple of new measures. I now track whether the stock beat First Call estimates by 20% or more and whether it showed 20% or more growth in earnings year-over-year.

There have been so many stocks reporting that I have opted not to display a table of results as it would be just too long. Instead, I'll present a summary of the numbers I have assembled thus far during this earnings season. These numbers include the stocks that reported over the course of the last three weeks including tonight, Monday.

  • We have tracked 167 tech stocks so far
  • 146 stocks beat First Call estimates which amounts to 87%
  • 44 of those stocks beat earnings estimates by 20% or more
  • 100 stocks showed at least some year-over-year earnings growth whether they beat estimates or not
  • 41 have shown year-over-year growth in earnings of 20% or more
  • 98 stocks have shown year-over-year revenue growth. That amounts to about 58%
  • 35 have shown revenue growth of 20% or more
  • 88 have provided upside guidance which amounts to about 52%. 
  • 27 others provided mixed or in-line guidance.
  • Only 3 stocks offered downside guidance
Given that we are still in the early stages of recovery from the Big Recession, these results look pretty darn good. Yet tech was the worst performing sector in the last two weeks of January.

I still contend that tech deserves more respect, especially in light of the relatively good guidance being provided and the fact that topline growth is being registered in more than half of those stocks reporting. This means that for many of these companies, earnings are not merely the result of cost cutting.

Keep an eye on this sector. Investors should catch on soon and tech could resume their leadership role.





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